US warns former Nicaragua leader over corruption

The "Fatman" of Nicaraguan politics was sent a clear signal that his days in power are numbered after the US warned that he could face trial on money laundering charges in an American court.

Known as Gordoman (Fatman) as much for his political weight as for his 22 stone, Arnoldo Aleman ruled Nicaragua as president from 1997 until January this year.

Now leader of the country's congress, Mr Aleman was last week charged with stealing $100m (£65m) of state funds during his presidency - an amount equivalent to the annual health or education spend in what is, after Haiti, Latin America's second poorest country.

Nicaragua's legal system is powerless to arrest Mr Aleman because, as a congressman, he is immune from prosecution. Congress alone has the power to strip him of this privilege, but won't while he controls a narrow majority of loyal deputies.

US ambassador Oliver Garza turned up the pressure on Mr Aleman this week, confirming the US was investigating his international accounts and money flows. "This is one of the biggest frauds committed in any country," Mr Garza claimed, signalling that any violations of US law would lead to charges in US courts.

Nicaragua's new president, Enrique Bolanos, went public with apparently damning evidence of his predecessor's activities earlier this month. Broadcasting live, and in front of an audience of diplomats, media and banner-waving public, Mr Bolanos and Francisco Fiallos, a state prosecutor, showed how millions were allegedly diverted from state institutions and the treasury.

Mr Aleman, his sister, brother, daughter, three former ministers and seven others were charged with money laundering, fraud and misuse of state funds. The mechanics of the different frauds were explained in a series of slides before the grand total of nearly $100m was announced.

Using state-backed credit cards, the former president allegedly spent $1.8m in a two-year period. With 48% of the population living on less than a dollar a day, the details shocked the country: $10,000 spent on two nights at the Cabaret Lido in Paris, $22,530 on Egyptian carpets, $37,627 on Indian artifacts and thousands more on jewels, hotels and bar bills.

"Arnoldo, I am sad, hurt and disillusioned," Mr Bolanos said. "I never imagined you would betray your people." The country, the president said, would never progress "while we are hostages to corruption and dishonesty". Mr Bolanos called on congress to "hear the cries of Nicaragua, that at the end of the process justice should be done".

Bitter enemies now, Mr Bolanos was vice-president during part of Mr Aleman's administration. It was Mr Aleman who chose Mr Bolanos as the Liberal party candidate for president in the November 2001 elections.

When Mr Bolanos took office in January and immediately launched a crusade against corruption, Mr Aleman is unlikely to have taken him seriously: he began his own term in 1997 with talk of austerity and by cutting up state credit cards for the cameras.

But in March, the first fraud investigation naming Mr Aleman was opened. In April, his closest ally, Byron Jerez, was arrested trying to flee the country. The former head of the tax bureau was carrying a dozen credit cards, thousands of dollars in cash and tens of thousands in bankers' drafts. Two former ministers have since fled the country.

Mr Aleman has fought back, using congress to paralyse the new administration. He refused to approve the presidential budget and stalled a package of tax reforms needed to qualify for new credit from the International Monetary Fund and start the process of cancelling Nicaragua's crippling external debt.

This week, as investigating magistrates prepared a formal request to congress to remove his immunity, Mr Aleman imposed a 20-day recess.

Mr Bolanos needs 47 votes in congress to remove Mr Aleman's immunity but can count on only 45 - a small number of Liberal party rebels plus Daniel Ortega and the Sandinistas, who were surprise losers in last year's elections.